Strategies, Challenges, and Answers

Ambiguous State Farm UM Coverage Allows Wife To Recover For Separate Emotional Distress Caused By Witnessing Husband’s Death

Mrs. Brewington rode her motorcycle a little behind Mr. Brewington on State Highway 49 in California. An oncoming rider crossed the center line striking Mr. Brewington and ejecting him from his bike. Mrs. Brewington witnessed the collision, stopped and called for assistance. Mr. Brewington died on the way to the hospital with Mrs. Brewington by his side.The negligent rider had no liability insurance. However, the Brewingtons had UM coverage with their motorcycle carrier State Farm in the … [Read more...]

A Reasonable Defense Trumps Bad Faith Even With Multiple Policy Limit Demands And An Excess Verdict

Jesse Kalberer and Eileen Mediola were in a car accident. Ms. Mediola’s attorney sent a policy limit demand to Jesse’s auto carrier, American Family. American Family rejected the demand claiming that the injuries were pre-existing and that the medical bills were overstated.American Family warned Jesse of a possible excess verdict. Plaintiff even emailed American Family and asked the company to settle so as to not expose Jesse to an excess verdict.At the same time, Jesse’s defense … [Read more...]

Bad Faith Set-Up Fail!

Chau caused an auto accident that killed the opposing driver Benjamin Buenaventura.  Chau reported the accident to the Nevada affiliate of AAA.  Less than a month later, the attorney for the claimant sent a time limit policy limit demand to AAA.  To meet the demand, AAA would have to pay the entire $100,000 each person limit to Clara Buenaventura within two weeks and driver Chau would have to certify that there was no other insurance.  … [Read more...]

Nevada Allows Policyholders To Sue Certain Managing General Agents and Third-Party Administrators For Bad Faith

An agent who acts for a disclosed principal is not liable for commitments made by the agent in the principal’s behalf.  See ALI’s Restatement (Second) of Agency § 320 (1958).  In the field of insurance, managing general agents, third-party administrators and independent adjusters have regularly shielded themselves from claims of bad faith brought by policyholders’ against the insurance company for which that agent works.  But that rule of hornbook law is beginning to erode following insurance … [Read more...]

A Nevada Insurance Company Does Not Commit Bad Faith By Simply Denying A Claim

Luck was not with Jose Montes.  He was hurt in a very serious motor accident.  He was hospitalized for six weeks and spent 46 weeks at home recovering.  Lucky for Mr. Montes he had purchased an accident insurance policy through agent Bank of America from insurer National Union Fire Insurance Company.  Unlucky though because when he made claim for benefits under the policy his claim was denied.  He believed that the insurance should have paid and that the exceptions to coverage were fraudulently … [Read more...]